Video Analysis

The chief equity strategist highlights the tech basket, particularly AI semiconductors like Avago and Nvidia, as 'incredibly attractive' due to strong earnings and reduced multiples. He also suggests that the focus for the mid-term elections will be on easing the burden on consumers, which could benefit financials, consumer stocks, and the housing sector.

• Tech basket, especially AI semiconductors (Avago, Nvidia), is 'incredibly attractive' with strong earnings and 20% lower multiples.
• Near-term dislocation in the software space is noted as an opportunity.
• Mid-term elections will drive policy to support consumers, benefiting financials, consumer stocks, and the housing sector.

The panel discusses escalating geopolitical tensions with Iran, the declining dollar, and potential shifts in US trade policy. Despite short-term market volatility and a tech sector 'shakeout,' analysts maintain a bullish long-term outlook, highlighting opportunities in undervalued tech and diversified global equities.

• Geopolitical tensions with Iran are escalating, with the US signaling a willingness for military action, leading to increased vulnerability in Iran.
• The dollar has been declining for the past 12 months, and there's anticipation of more US tariff relief, which could impact bond and equity markets.
• Despite a potential short-term market pullback (5% slip), the overall market remains bullish, with strong earnings and potential buying opportunities in tech and diversified international markets.

January's CPI report came in cooler than expected, largely due to a significant decline in energy prices, particularly gasoline. This led to a positive market reaction, with equity futures turning around from earlier lows. Despite some sector-specific pressures like in software, the overall macro economic data for the week, including unemployment and inflation, is viewed as positive, potentially influencing the Fed's future decisions.

• January Headline CPI (M/M) was 0.2% (vs. 0.3% estimate) and (Y/Y) was 2.4% (vs. 2.5% estimate), indicating cooler-than-expected inflation.
• Energy prices, especially gasoline (down 7.5% Y/Y), were the primary drivers of the cooler CPI, with energy commodities down 3.3% and fuel oil down 5.7%.
• The 10-year Treasury yield decreased to 4.09%, and equity futures saw a positive turnaround, reflecting a generally positive macro outlook for the U.S. economy.

Senator Thom Tillis states he will block future Federal Reserve board nominations until a Justice Department probe into the Fed's renovations is resolved. He views the investigation as a politically motivated 'flex' to remove the current Fed Chair, Jerome Powell, and emphasizes the importance of Fed independence. This creates uncertainty regarding future Fed leadership.

• Senator Tillis will not approve any Fed board nominee until the Justice Department probe into the Fed's renovations is settled.
• He believes the investigation was a 'flex' to pressure current Fed Chair Jerome Powell to step aside.
• Tillis argues that the investigation lacks sufficient evidence and was initiated without proper referral from the committee.

The January US CPI report showed headline inflation rising 2.4% year-over-year, which was slightly less than the 2.5% estimate, while core CPI rose 2.5% year-over-year, meeting expectations. This softer-than-anticipated headline figure, driven by declines in gasoline and used car prices, led to a positive market reaction with rising equity futures and falling Treasury yields.

• US Jan. Consumer Prices (CPI) rose 2.4% Y/Y, below the 2.5% estimate, and 0.2% M/M, below the 0.3% estimate.
• US Jan. Core CPI rose 2.5% Y/Y and 0.3% M/M, both in line with estimates.
• Gasoline prices were down 3.2% M/M, and used car prices fell 1.8% M/M, contributing to the softer headline CPI.
• Treasury yields fell across the curve, and S&P, Nasdaq, and Russell 2000 futures rose following the data release.

The discussion focuses on the impending DHS shutdown due to Senate Democrats blocking a funding bill, with Republicans criticizing their stance as 'chaos' over border security. It also covers the House-passed 'Save America Act' for election integrity, which faces a Senate filibuster, and the challenges of AI expansion in Florida, particularly concerning energy consumption for data centers.

• DHS faces a shutdown as Senate Democrats blocked a stop-gap funding bill, impacting critical agencies like ICE, Border Patrol, TSA, Customs, Coast Guard, and FEMA.
• Republicans accuse Democrats of causing 'chaos' by refusing to negotiate on border security and election integrity measures, such as requiring voter ID and proof of citizenship.
• AI expansion in Florida is discussed, highlighting concerns about data centers' energy consumption and the need for sustainable power solutions to avoid utility price increases.

The discussion covers futures market sentiment, upcoming January CPI data with differing analyst expectations, and recent earnings reports from Applied Materials, Coinbase, and Arista Networks. While some market segments show selling pressure, strong demand in AI-related tech and potential for a lighter inflation print could shift sentiment.

• Futures are lower, with selling pressure in Big Tech, commercial real estate, and financials, attributed to seasonal de-risking and technical rollovers.
• January CPI print is highly anticipated, with a wide range of expectations (Street: 0.3% MoM, Cleveland Fed: 0.12% MoM), potentially leading to significant market volatility.
• Applied Materials (AMAT) and Arista Networks (ANET) reported strong earnings, beating revenue and EPS estimates, driven by AI-related demand and data center build-out.
• Coinbase (COIN) beat adjusted EPS but missed revenue, facing headwinds from decelerating crypto trading volume, though services revenue showed growth.
• S&P 500 levels to watch are 6900 (upside) and 6700 (downside), with an implied 1.33% move, and a VIX spike to 25-26 could signal capitulation.

Dan Ives of Wedbush Securities argues that the current software sell-off, driven by AI disruption fears, is 'extremely overblown.' He believes massive CapEx spending by Big Tech will fuel an accelerating AI revolution, creating a 'golden buy opportunity' for established winners in the tech and software sectors, despite some pure-play losers.

• Big Tech's CapEx of $650-700 billion is a central driver for the AI revolution, with an 8-10x multiplier effect across tech infrastructure.
• The current tech and software sell-off is 'overblown' and 'disconnected,' presenting a 'golden buy opportunity' for established winners.
• AI represents the 'fourth industrial revolution' with real use cases and established enterprise install bases, unlike the dot-com bubble.
• 2026 is projected as an inflection point for AI, marking year 3 of a 10-year AI revolution cycle.

Thomas Lee discusses the disruptive impact of AI on the software sector, predicting job losses and disinflation. He suggests the stock market will prioritize AI's long-term effects over current labor reports, potentially leading the Federal Reserve to adopt a more dovish stance with lower interest rates.

• AI is 'wreaking havoc' across the software sector, leading to anticipated job losses.
• The disinflationary nature of AI could prompt the Fed to pursue lower interest rates.
• The stock market's initial reaction to potential Fed appointees might not fully account for AI's long-term economic implications.

India has unveiled a major overhaul of its inflation index with a new CPI series based on 2024 consumption patterns. This new series shows January consumer prices rising 2.75% year-on-year, slightly below estimates. The changes aim to provide a more accurate and credible reflection of the economy, boosting the case for the RBI to maintain current rates.

• India's January consumer prices rose 2.75% Y/Y, slightly below the 2.77% estimate, supporting the RBI's decision to hold rates for an extended period.
• The new CPI series, based on 2024 consumption patterns, expands the basket from 299 to 358 items, removing outdated goods and adding modern spending categories like streaming services and gym equipment.
• Food's weight in the CPI is reduced, while services like housing (including utilities) and consumer discretionary items see increased weighting, reflecting evolving spending patterns and improving data accuracy and global credibility. New GDP and IIP series are also coming.

Stephen Moore, co-founder of Unleash Prosperity, discusses the future of the USMCA trade deal, viewing Trump's stance as strategic posturing to prevent China from exploiting North American trade. He also praises the January jobs report, attributing strong private sector growth and reduced government employment to Trump's economic policies, which he calls an 'economic miracle'.

• Trump's consideration of withdrawing from USMCA is seen as a negotiation tactic to prevent China from using Canada and Mexico as trade intermediaries.
• The January jobs report is highlighted for strong private sector job growth and a reduction in federal government employment.
• Moore advocates for a free enterprise system in healthcare, criticizing the government's role in the sector's exploding costs.

Charles Payne discusses the current market environment, highlighting a disconnect between investor anxiety driven by 'misinformation' and strong underlying fundamentals. He points to increased retail investor bearishness and AI-related angst causing global tech stock declines, yet emphasizes robust earnings, strong software growth, and high profit margins, suggesting a potential opportunity for informed investors.

• AAII members show a sharp increase in bearish sentiment (38.7% vs. 31.0% historical average), indicating widespread anxiety.
• Despite strong earnings season with 'off the charts' stock responses, AI angst has wiped billions off tech stocks globally, including Indian IT stocks and US real estate service stocks.
• Software sector fundamentals remain robust with declining P/E ratios, 'through the roof' growth, and net profit margins (26%) significantly outperforming the S&P 500 (14%).
• Wall Street shows record high short interest in software, while retail investors are 'buying the dip' in the sector.

The options market experienced record volume in 2025, with continued growth into January 2026, driven by strong retail engagement and the rise of 0DTE (zero days to expiration) options. This surge in activity is attributed to both retail and institutional investors utilizing options for tactical decisions and risk management, especially in highly appreciated 'Mag 10' stocks and volatile assets like Bitcoin ETFs.

• Options volume hit a record in 2025, averaging 61 million contracts/year, and is up another 15% in early 2026 to 67 million contracts/year.
• Retail investors account for approximately half of the options volume, while 0DTE trading makes up nearly two-thirds of activity in major products like SPX.
• Increased institutional activity is observed, with options used to adjust risk exposure in highly concentrated 'Mag 10' positions (e.g., Tesla, Nvidia, Apple) without incurring significant tax hits.
• The efficiency and low slippage of short-dated options make them attractive for both buyers and sellers, enabling quick tactical plays on market movements.
• Bitcoin ETFs, particularly IBIT, are seeing significant options trading due to high volatility and increased adoption, offering opportunities for leveraged plays.

The discussion centers on the 'Sell U.S.' trade, highlighting how international and emerging markets significantly outperformed the S&P 500 last year. Major asset managers like BlackRock, Pimco, and Amundi are pivoting away from U.S. assets, citing 'unpredictable policies' and seeking global opportunities. The panel suggests this trend has legs, driven by market reforms outside the U.S. and a weakening dollar.

• Last year, international ETFs (Israel, Brazil, Emerging Markets, Japan, FTSE 100) saw returns ranging from +21% to +43%, significantly outpacing the S&P 500's +16.39%.
• BlackRock's Rick Rieder and Pimco are reportedly dumping U.S. credit/assets in favor of emerging markets, with Pimco citing 'unpredictable policies' for a multi-year diversification.
• Amundi, Europe's largest asset manager, plans to cut U.S. dollar exposure, anticipating further dollar weakening.
• Wall Street's hunt for cheaper stocks has gone global, with a focus on 'old economy' sectors like energy, materials, and utilities in international markets to support new infrastructure (e.g., AI).

Altruist CEO Jason Wenk discusses the market's reaction to AI in wealth management, emphasizing that AI empowers financial advisors rather than displacing them. He highlights Altruist's new AI-powered tax planning tool, Hazel, which streamlines tax strategy creation. Wenk argues that AI's true disruptive potential lies in its combination with modern, vertically integrated infrastructure, posing a challenge for legacy firms.

• AI is an 'incredible equalizer' for wealth management, making services more affordable and accessible by empowering advisors, not displacing them.
• Altruist's Hazel AI Tax Planning tool processes client tax data (1040s, paystubs, CRM) to generate personalized tax strategies and uncover savings opportunities in minutes.
• The significant market concern stems from the combination of AI with modern, efficient infrastructure, which could lead to a monumental shift in where advisors choose to custody assets.

The video discusses how major tech companies like Alphabet and Oracle are successfully raising significant debt in both U.S. and international markets to fund their AI buildout, indicating robust investor demand. Goldman Sachs' Jonny Fine highlights favorable credit conditions and offers a dovish outlook on Fed policy, anticipating four rate cuts this year and a move towards 3.5% for the 10-year Treasury yield.

• Alphabet and Oracle have seen record-breaking financing activity for AI buildout, with strong demand in various debt markets.
• Credit conditions are currently very affable, with spreads near 1997 lows, suggesting no major disruption to credit costs.
• Jonny Fine expects four Fed rate cuts in 2024, with the first likely in June, and projects the 10-year Treasury yield to reach 3.5%.

Former Federal Reserve Vice Chairman Roger Ferguson argues that current economic data, including a stable labor market and strong GDP, does not support aggressive Fed rate cuts. He suggests "maybe one more" cut this year, advocating for a "wait and see" approach to avoid stoking inflation, especially given potential productivity gains from AI.

• Economic data, including a stable labor market (U3 unemployment at 4.3%, robust private sector job creation), strong GDP, and existing wealth effects, does not support aggressive Fed rate cuts.
• Ferguson suggests "maybe one more" rate cut this year, followed by a "wait and see" approach, rather than the market's initial expectation of multiple cuts.
• He cautions that cutting rates in response to AI-driven job losses, if the economy is otherwise strong, could risk stoking inflation, as the Fed's tools are for aggregate demand, not structural labor market changes.
• Market expectations for a June rate cut have fallen below 50%, and a March cut is now off the table, which Ferguson views as an appropriate reaction to the data.

Julian Emanuel, Evercore ISI's Chief Equity & Quantitative Strategist, argues that the hallmarks typically signaling the end of a bull market are not currently present. He points to a strong jobs report, stable US 10-year yields, and a lack of 'true investor FOMO' in stocks, suggesting continued upside ahead for the market driven by an 'AI disruption trade'.

• The typical ingredients for a bull market's end (recession, Fed hiking rates, long-end pressure, widespread investor FOMO in stocks) are not evident.
• Current economic data, such as a strong jobs report and 'sedate' US 10-year yields, do not support a recessionary outlook or aggressive Fed tightening.
• While value has outperformed and staples are 'screaming higher' due to FOMO, this FOMO is concentrated in areas like gold/silver, not broad equities, and financials are underperforming, indicating a nuanced market driven by AI disruption rather than a broad market top.

The discussion analyzes the January jobs report, presenting a mixed but ultimately stabilizing view of the labor market. While past hiring figures for the previous year were significantly revised downward, the latest January data showed stronger-than-expected job growth and an unexpected drop in unemployment, indicating the labor market is gaining its footing.

• The labor market appears to be stabilizing, with the January jobs report exceeding expectations for hiring and showing an unexpected drop in the unemployment rate.
• Benchmark revisions revealed that the pace of hiring last year was significantly weaker than initially reported, with an average of only 15,000 jobs added per month instead of 49,000.
• Despite recent high-profile job cut announcements causing anxiety, the current positive data suggests a more robust and recovering labor market.

Cameron Dawson, CIO of New Edge Wealth, views current market volatility as a 'positioning reset' rather than a 'true growth scare', citing contained high-yield spreads. However, she highlights concerns about a softening consumer discretionary-to-staples ratio and persistent selling pressure in the software sector, which could signal future economic shifts.

• Current market volatility is likely a 'positioning reset' due to high valuations and earnings expectations, not a 'growth scare' yet.
• Key metrics to monitor for a true growth scare include high-yield spreads (currently contained) and the equal-weight consumer discretionary vs. consumer staples ratio (showing signs of softening).
• The strong consumer spending in 2023 was fueled by a 'K-shaped economy' and the wealth effect from robust housing and stock markets, despite lagging jobs data.
• The software sector is experiencing 'software soreness' with continued selling pressure, indicating crowded positions and short-term trading opportunities rather than long-term conviction.